The Agricultural Ministry department ONCCA, has admitted that it has been rejecting export permits for wheat yesterday.Argentina is one of the worlds top five exporters of wheat and the severe drought will make the harvest the lowest for the last 30 years.

Argentina consumes 6 million tons of wheat a year on the domestic market, the government have fears there could be a shortage of wheat to service this home front.

There was approval given for the export of 1.2 million tons to Brazil earlier in the month, since that time no new applications to export have been granted.

La Nina produces drought: Texas and Florida have both been hard hit by winter drought, receiving less than half of normal rainfall since November 1st, and in many areas under 30% of normal. This is a direct effect of a weak subtropical jet stream with La Nina. The southern jet stream is the provider of winter rain storms, but when it is absent, showers are few and far between.

Kansas wheat declining: The lack of winter rainfall is starting to impact the nation' s top wheat producing state, especially in the southwest district where field moisture is 97% short to very short. The state wheat rating on February 1st is still favorable relative to Oklahoma and Texas, 59% good to excellent, 31% fair and 10% poor, but this was a step down from a month ago when 64% was good-excellent, 27% was fair and 9% was poor.January was extraordinarily dry.

Texas drought extreme: Texas wheat was 35% very poor, 29% poor and only 12% good on February 1st indicating irreversible damage in wheat. In addition, pastures and range lands were mostly poor to very poor, straining the cattle industry in the Longhorn state. Producers in the Blacklands and South Texas were considering reducing their herd size due to dry conditions, as supplemental feeding remained high.

Feb. 2 (Bloomberg) -- South Africa, a net importer of wheat, may have to buy higher-priced grain from the U.S. this year because of curbs on exports from Argentina, an industry group said.

“We' ll probably import a bit more from the U.S.” said Jannie de Villiers, director at the Pretoria, South Africa-based National Chamber of Milling. “U.S. wheat is considerably more expensive.”Last year, almost half of South Africa' s imported wheat came from Argentina, which shipped 684,160 metric tons to the country.South Africans are “extremely angry” that food prices continue to rise, the Congress of South African Trade Unions said last week. Pick' n Pay Ltd., the country' s second-largest food retailer, will meet with 30 of its largest suppliers this week to discuss food costs, Johannesburg-based newspaper Business Day said Jan. 26.

South Africa probably will have to import about 1 million tons of wheat in the year through September after unfavorable weather caused “a few quality problems,” de Villiers said today.

CANBERRA, Feb 4 (Reuters) - Drought in Australia's main food growing region of the Murray-Darling river system continues, with water stores near record lows despite recent rains, the head of the government's oversight body for the system said on Wednesday.

The long-running drought has hit irrigated crops such as rice, grapes and horticulture hardest, but has had less impact on wheat with good falls of rainfall in grain-growing areas to the north of the Murray-Darling River basin.

"The immediate prospects are not good as only about 10 percent of Murray system inflows normally occur between February and May, and the latest rainfall outlook from the Bureau of Meteorology shows only neutral conditions across the Basin for the next three months," said Rob Freeman, chief executive of the Murrary-Darling Basin Authority.

The Murray-Darling basin, which is as large as France and Germany combined, accounts for 41 percent of Australia's agriculture and provides A$21 billion ($13.54 billion) worth of farm exports to Asia and the Middle East. Around 70 percent of irrigated agriculture comes from the basin.

Dry land wheat crops are also grown in the region but crops have struggled in recent years. The region contributed little to a boost in Australia's wheat production to 20 million tonnes for the just completed 2008/09 harvest from 13 million tonnes harvested a year earlier.

The drought has already wiped more than A$20 billion from the $1 trillion economy since 2002. It is the worst in 117 years of record-keeping, with 80 percent of eucalyptus trees already dead or stressed in the Murray-Darling region.

Drought threatens China wheat production2009-02-04roll of irrigating plastic pipe is seen on an arid wheat field in Shuanglong Village, Lixin County of east China's Anhui Province, Jan. 22, 2009. (Xinhua Photo)BEIJING, Feb. 3 (Xinhua) -- Lack of rainfall has led to severe drought in northern China, affecting more than 140 million mu (9.3 million hectares) of wheat, said the Ministry of Agriculture (MOA) on Tuesday.

By February 2, 141 million mu wheat in six major grain production provinces, including Henan, Anhui, Shandong, Shanxi, Gansu and Shaanxi, were hit by drought, Agriculture Minister Sun Zhengcai said at a video conference called to coordinate drought relief efforts.

The drought is casting a shadow over China's wheat production, as almost 43 percent of the winter crop has been affected. In comparison, nine million mu of wheat suffered from drought in the same period last year.[Last year 9 million mu of wheat suffered from drought. This year 141 million mu is suffering from drought.]

Sun said little rainfall since last October was the main reason for the prolonged drought in most parts of the northern areas, and frequent cold snaps this winter made the situation worse.

According to Monday's weather report by China Meteorological Administration, severe drought in north China was expected to continue as no rain has been forecasted for the next ten days.

The MOA warned that more wheat crop could perish if drought continues to linger.

My reaction:

1) Texas and Florida have both been hard hit by winter drought, and irreversible damage has been done to wheat crops in Texas.

2) Argentina has ceased wheat exports. Concern with domestic shortages, Argentina has granted no new applications to export since mid January.

3) South Africa will have to buy higher-priced grain from the U.S. this year because of curbs on exports from Argentina.

4) South Africans are "extremely angry" that food prices continue to rise.

5) 41 percent of Australia's agriculture continues to suffer from the worst drought in 117 years of record-keeping.

6) severe drought in northern China is affecting more than 140 million mu (9.3 million hectares) of wheat (compared to 9 million mu of wheat which suffered from drought last year). The severe drought is expected to continue as no rain has been forecasted for the next ten days. More wheat crop could perish if drought continues to linger.

Conclusion: There will be food shortages around the world. Nations like South Africa will buy US wheat, driving up the price here in the states.